<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10SB/2A GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALLBUSINESS ISSUERS
PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES AND EXCHANGE ACT OF 1934
HIKING ADVENTURES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 88-0370480
(State of organization) (I.R.S. Employer Identification No.)
3123 Trueno Road, Henderson, NV 89014
(Address of principal executive offices)
Registrant's telephone number, including area code: (702) 435-7947
Registrant's Counsel: Patrick C. Clary, Chartered
520 South Fourth Street, Suite 360, Las Vegas, NV 89101, (702) 382-0813.
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act: Common Stock
ITEM 1. DESCRIPTION OF BUSINESS
BACKGROUND
Hiking Adventures, Inc., (the "Company") was organized as a Nevada corporation
on October 18, 1996 for the purpose of publishing and marketing a collection of
hiking trail guides. Its principal place of business is located at 3123 Trueno
Road, Henderson, NV 89014. The Company is voluntarily filing this Registration
Statement. The Company is filing this Registration Statement in order to have
the ability to raise capital from the public sector with a view towards engaging
in all operational activities contemplated by the Company and articulated in
this Registration Statement with the hope and objective of increasing
shareholder value.
The Company was formed by Gary C. Vesperman, who was issued 6,000 founders
shares in consideration of expenditures totaling $414.55 for incorporating the
Company. On January 13, 1998, Timothy J. Zelenka joined the Company's board and
was named Secretary and Treasurer. On that date, Mr. Zelenka purchased 100,000
shares of the Company's common stock for the sum of $6,742.11, and Mr. Vesperman
purchased 94,000 shares for the sum of $6,337.58. An additional 600,000 shares
were issued to 28 shareholders for $0.05 per share in an offering (the
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"Offering") pursuant to Rule 504 of Regulation D (See Item 10, "Recent Sales of
Unregistered Securities"). This Offering commenced on March 25, 1998, and was
closed on July 7, 1998.
BUSINESS OF ISSUER
The Company's purpose is to publish and market a collection of hiking trail
guides. Typical hiking trail guides contain detailed descriptions of each trail
and one or two black and white photographs. The Company intends to fill a niche
in the marketplace by emphasizing hiking trails of exceptional merit,
accompanied by color photographs of outstanding quality.
Each guidebook will feature one trail. The books will be 5 1/2 by 8 1/2 inches
in size, printed on glossy paper to allow printing of full color photographs.
The front cover will show the name of the hiking trail at the top, with eye
catching photographs below. The insides of the front and rear covers will
contain information about the Company's other hiking guides and hiking
information. The back cover includes a photograph and the usual information,
such as retail price, publisher name and address, copyright year, and ISBN
number.
The photographs will be shown on each page, in the sequence in which the trail
is traversed. The first few pages will include summary information about the
trail, such as its location, a map, and some general comments as to why the
trail is considered to be outstanding. The author is then introduced, and
information is included concerning the photographs. Comments about the geology,
history, campsites, and plant and animal life will also be included.
The Company also plans to research the feasibility, economic viability, and
marketing appeal of providing hiking information, in addition to the guidebooks,
to hikers via electronic methods using some of the technology already in place
in the satellite-based global positioning systems ("GPS"). The Company envisions
a handheld device, similar to a GPS, that would provide a hiker on a trail with
positioning information, weather reports for the area, access road conditions,
campsite and lodging availability, and the ability to make reservations. The
device would also feature an alarm that could alert a hiker to troublesome or
dangerous conditions on the trail, such as bad weather, grizzly bear warnings,
etc. This device is not currently under development, and the Company may
determine that development of such a device is not economically feasible.
The Company plans to distribute these guidebooks over the Internet. Mr.
Zelenka's expertise in this area will help the Company develop a web site and
have it listed on all of the major search engines. The Company has been in
contact with an online publishing company who has expressed an interest in
publishing the guidebooks on their site.
In addition to the Internet marketing, the Company also plans to pursue four
other means of marketing and distributing the guidebooks. The first of these is
advertisements in hiking and environmental organization publications. Second,
the Company will attempt to display and sell the books in the stores and visitor
centers in each area in which the trails are located. Third, the Company will
try to get the guidebooks included in catalogs featuring sporting goods,
guidebooks, and other similar outdoor oriented items. Finally, the Company may
conduct a targeted direct mail campaign to sell photographs that are not
included in the guidebooks.
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The Company plans to design and print the guidebooks internally using desk top
publishing software. The major raw materials needed are the photographs, which
Mr. Vesperman either has already taken or will take prior to publication, and
paper, which is readily available through numerous retail outlets.
None of the Company's current business activities, including those business
activities currently being contemplated by the Company, require government
approval.
The two Company officers, Messrs. Vesperman and Zelenka, are the company's only
employees at this time.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
MINIMAL OPERATING HISTORY, MINIMAL REVENUE AND MINIMAL ASSETS. The Company has
minimal operating history and has received only some revenues or earnings from
its intended operations. In addition, the Company has received a small amount of
income from "consulting" projects performed by the Company's management during
the most recent fiscal year. While this revenue has provided the Company with
some working capital for its initial development, it is not likely that the
Company or its principals will generate any additional consulting income in the
future. The Company has limited assets and financial resources. The Company
will, in all likelihood, sustain operating expenses without corresponding
revenues, at least until it publishes its first guidebook. This may result in
the Company incurring a net operating loss. (See Plan of Operation).
COMPETITION FOR TRAVEL PUBLISHING. The travel and tourist publishing business
are intensely competitive. The Company may be at a disadvantage with other
companies, some of which have larger technical staffs, established market
shares, and greater financial and operational resources than the Company. There
can be no assurance that the Company will be able to compete successfully.
ONE AGREEMENT FOR PUBLISHING AND DISTRIBUTION. To date, one agreement is in
place for the publication and sale of hiking guide books. On June 10, 1999, the
Company contracted with Business Concepts, Inc., a Nevada Corporation, as
follows:
1. The Company has agreed to publish and sell to Business Concepts, Inc., and
Business Concepts, Inc., has agreed to buy from the Company, three (3) sets
of hiking guide books to be entitled, "Bears Ears Lizard Head North Fork
Popo Agie High Meadows Trail Loop Hiking Adventures" ("Guide #1"), "Bird
Ridge Trail Hiking Adventure" ("Guide #2"), and "Mount Abbott Trail Hiking
Adventure" ("Guide #3"). The Company has agreed to publish and Business
Concepts, Inc., has agreed to purchase 20,000 copies of Guide #1, 20,000
copies of Guide #2, and 20,000 copies of Guide #3. Business Concepts, Inc.,
has agreed to purchase the hiking guides at $3.15 per guide, subject to a
six (6%) percent volume discount, resulting in a net price of $2.961 per
guide, on a COD basis. The hiking guides will be
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produced and provided according to the following schedule.
<TABLE>
<S> <C> <C>
Guide #1
Delivery Date Guides to be Delivered
August 1, 1999 5,000
September 1, 1999 5,000
October 1, 1999 through 1,000 per month on the first day
July 1, 2000 of each month
Guide #2
Delivery Date Guides to be Delivered
October 1, 1999 5,000
November 1, 1999 5,000
December 1, 1999 through 1,000 per month on the first day
September 1, 2000 of each month
Guide #3
Delivery Date Guides to be Delivered
December 1, 1999 5,000
January1, 2000 5,000
February 1, 2000 through 1,000 per month on the first
November 1, 2000 of each month
</TABLE>
RELIANCE ON ONE AGREEMENT FOR THE PURCHASE OF HIKING GUIDES. To date, only one
agreement exists for the purchase of hiking guides. In the event that the
Company is unable to satisfy the terms of the purchase agreement, or the
purchaser is unable to fulfill its obligations under the purchase agreement, the
Company's expenses will be greater than its revenues resulting in the Company
operating at a loss.
The Company has had preliminary discussions with an online publishing company
who has expressed an interest in publishing the guidebooks on its website. The
online publishing company is waiting, however, for a final draft before any
agreement can be proposed.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. The two officers and
directors are the only employees of the Company. Each of them has a full time
job, and devotes as much time as possible to the preparation of the guidebooks.
While this limited availability increases the amount of time it will take to
prepare a final draft, the experience of the management makes it imperative for
them to perform this work. Loss of the services of either individual would
adversely affect development of the Company's business and its likelihood of
continuing operations. See Item 5.
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LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has not conducted
or received results of market research indicating that market demand exists for
the guidebooks. Moreover, the Company does not have, and does not plan to
establish, a marketing organization. The Company is relying completely on the
experience and knowledge of Mr. Vesperman in this regard.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and "forward looking
statements" as that term is defined in Section 27A of the Securities Act of 1933
as amended (the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934 as amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical fact, are
forward looking statements. Although Management believes that the expectations
reflected in these forward looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without limitation, in
conjunction with those forward looking statements contained in this Statement.
The Company plans to benefit from publishing and marketing guidebooks featuring
a collection of hiking trails of exceptional merit. Each hiking trail
description will begin with a few sentences of identification, narrative, and
location. Narratives may include discussions of the trail's geology, biology,
and history. The narrative of each trail is planned to be interspersed liberally
with color photographs taken at various points along the trail.
The Company's President, Gary C. Vesperman, has hiked, rafted, backpacked, and
otherwise visited a total of approximately 125 units of the Canadian and
American national park and wilderness systems, plus dozens of state and
provincial parks. Thus he is uniquely capable of judging the relative scenic
merits of hiking trails. He personally hiked and selected four trails which will
be the subject of the first four guidebooks.
The Company currently has an inventory of approximately 1,000 photographs which
were purchased from Mr. Vesperman for a token payment of $1.00. These
photographs, together with other photographs taken by Mr. Vesperman in August,
1998, will be used in the Company's initial four guidebooks.
In addition, the Company plans to acquire additional photographs for use in
later editions. Weather and seasonal conditions typically influence the time of
year when a trail should be hiked for optimal picture taking. For example,
drought conditions in late summer are ideal for high altitude trails. Wet
winters are required for colorful spring wildflower displays in desert areas. So
hiking trail photography would tend to be opportunistic and somewhat sporadic.
In order to reduce costs, the Company plans to combine photographing trips to
several candidate hiking trails in each category, when weather and seasonal
conditions appear favorable.
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The Company does not anticipate the need for additional cash during the next 12
months. The Company does not intend to hire additional employees or acquire
significant plant or equipment during that time period.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property. Office services are
provided without charge by Gary C. Vesperman, the President and Director of the
Company.
The Company's principal place of business is comprised of 250 square feet of
operating space located at 3123 Trueno Road, Henderson, Nevada, 89014. As
aforesaid, these accommodations are currently being provided to the Company,
without charge, by Gary C. Vesperman.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information relating to the beneficial ownership
of the Company's common stock by those persons holding beneficially more than 5%
of the Company's common stock, by the Company's directors and executive
officers, and by all of the Company's directors and executive officers as a
group. In this case, the only holders of more than 5% of the Company's common
stock are the directors and executive officers, so only one table is shown.
<TABLE>
<CAPTION>
Title of Class Name/Address Shares Percentage
Class Of Owner Beneficially Ownership Owned
<S> <C> <C> <C>
Common Gary C. Vespeman 99,300 12.41%
3123 Trueno Road
Henderson, NV 89014
Common Timothy J. Zelenka 100,000 12.50%
347 Gana Court
Las Vegas, NV
Common All officers and 199,300 24.91%
directors
(2 individuals)
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The members of the Board of Directors of the Company serve until the next annual
meeting of the stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. Information as to the
directors and executive officers of the Company is as follows:
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<TABLE>
<CAPTION>
Name/Address Age Position
<S> <C> <C>
Gary C. Vesperman 55 President/Director
3123 Trueno Road
Henderson, NV 89014
Timothy J. Zelenka 42 Secretary/Treasurer/Director
347 Gana Court
Henderson, NV 89014
Gary C. Vesperman; President
</TABLE>
Gary C. Vesperman, age 55, is the President and a Director of the Company. His
previous experience has been with Film Funding, Inc., Las Vegas, Nevada from
February 1992 until June 1998 where he worked as Vice President.
From April 1986 until October 1991 he was the Senior Technical Writer for EG&G
Special Projects in Las Vegas. He wrote software user's guides and theory of
operation/maintenance manuals for radar systems. He also edited proposals for
security systems.
Mr. Vesperman was previously a technical writer with 18 Silicon Valley
electronics companies including Control Data, Ford Aerospace, Ampex, Verbatim,
Amdahl, Timex, Mohawk Data Sciences, Hewlett Packard, and Moore Systems. His
projects have included a broadcast television camera, vehicle electronics
testing system for a General Motors luxury car assembly line, power control and
distribution systems, and many types of computer equipment.
After over a quarter century of research, Mr. Vesperman completed the design of
a fiberoptic network of computerbased segmented courses. Fiberoptic cables would
link up to several dozen metropolitan high schools into a combination of
uniquestatistical techniques, video, teleconferencing, superlearning, and a
three-level computer hierarchy.
EDUCATION
BS Electrical Engineering, University of Wisconsin, Madison, Wisconsin 1968
EXPERIENCE:
Film Funding, Inc. Las Vegas, NV 2/92 6/98
Started as Associate Producer. Promoted to Vice President and Chief Operating
Officer July 1992. Edited screenplays and numerous business documents. Attended
several inventors conferences and met with numerous inventors to obtain new
business. Assisted with several business startups.
EG&G Special Projects, Las Vegas, NV 4/86 10/91
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Senior Technical Writer Wrote software user's guides and theory of
operation/maintenance manuals for radar and computer hardware using WPS/PLUS-VMS
AND WordPerfect 5.0 for DEC's VMS. Edited proposals and reports using Word 5.2
on IBM PC compatible. Compiled cable and wire listings using Lotus 123.
Developed engineering and publications document format standards. TS/SBI
security clearance.
Hewlett-Packard Company, Cupertino, CA 10/84 7/85, 12/85 3/86
Technical Writing Consultant Wrote functional circuit theory for Operator
Interface unit and Vehicle Interface Unit maintenance manuals. Came back to
write software user's manuals and other miscellaneous documents.
Amdahl Corporations, Sunnyvale, CA 9/83 4/84
Senior Technical Writer Wrote power distribution system theory of operation
manual for the large-scale Amdahl 580 mainframe computer. Used a 3270 terminal,
SCRIFFW editor and EDGAR formatter.
Timex Corporation, Cupertino, CA 1/83 8/83
Senior Technical Writer Cleaned up specifications and schematics. Using a Wang
word processor, wrote part of internal hardware manual on Timex 2000 computer.
(Not completed due to facility move to Connecticut.)
Mohawk Data Sciences, Los Gatos, CA 9/82 11/82
Senior Technical Writer Technical consultant for circuit descriptions of
microprocessor-based telecommunications products. Used CPMbased text editor.
Ampex Corporation, Redwood City, CA 10/79 5/81
Senior Technical Writer Principal author of theory of operation for commercial
broadcast color television camera (most complicated TV camera sold). Wrote video
signal generating, video signal processing, auto centering, power supply,
controls, etc. Revised operator's manual and maintenance procedures.
Ramtek Corporation, Sunnyvale, CA 1/79 3/79
Senior Technical Writer Wrote manual for Interdata CPU/graphic display
interface. Incorporated changes to other manuals. Verbatim Corporation,
Sunnyvale, CA 9/78 - 1/79 Senior Technical Writer - Wrote manual for flexible
diskette certifier with magnetic recording, op amp, and microprocessor theory.
Ampex Corporation, Redwood City, CA 10/77 1/78
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Senior Technical Writer Revised tape transport manual to military
specifications.
Amcomp, Sunnyvale, CA 9/79 - 5/77
Senior Technical Writer Wrote field service notes for tape and disk drives.
Wrote manual for disk drive test unit.
Moore Systems, Sunnyvale, CA 11/75 - 6/76
Associate Engineer Documented supervisory control and data acquisition systems.
Wrote manual for pulse output unit.
Ford Aerospace Corporation, Palo Alto, CA 10/75 - 11/75
Senior Publications Engineer Wrote computer channel interface theory to military
specifications.
Control Data Corporation, Sunnyvale, CA 2/68 - 10/74
Engineer Writer Wrote manuals for hybrid analog/digital computer linkages,
peripheral controllers, dual extended core storage controllers, I/O channel
interfaces and switches, mainframe modifications, etc. Cost estimated and
scheduled manuals. Trained new hardware writers. Developed format changes and
new special hardware manual standard. Demonstrated ability to detect logic
design errors. Found numerous errors in three projects and detected an error in
three others which had escaped complete checkout. One such error required
replacing 12 printed circuit cards.
Timothy J. Zelenka; Secretary/Treasurer
Timothy J. Zelenka, age 42, is Secretary/Treasurer and a Director of the
Company. The highlights of his career includes stints as an independent
Webmaster contractor for various financial services companies. He also has been
a project manager for cellular telephone construction and a computer specialist
for inventory control for an off-price wholesaler of designer clothing.
Wireless Internet Services, Inc., Las Vegas, NV, 2/99 - Present
Technical representative, web designer
Business Concepts, Inc., Las Vegas, NV, 8/97 - 2/99
Web master
Self Employed, Las Vegas, NV, 1/97 - 7/97
Web page designer
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Nassiri, Inc., Las Vegas, NV, 8/95 - 12/96
Inventory Specialist
CommCon, aka North American Tower Service, Matthews, NC, 2/95 - 8/95
Project manager trainee
EDUCATION
Pennsylvania State University, Landscape Architecture and Hotel/Restaurant
Management.
At this time, Gary C. Vesperman intends on spending approximately forty (40%)
percent of each work week attending to the affairs of the Company and engaging
in Company matters. Additionally and at this time, Mr. Timothy Zelenka intends
on spending approximately ten (10%) percent of each work week attending to the
affairs of the Company and engaging in Company matters.
ITEM 6. EXECUTIVE COMPENSATION
No compensation of directors or executive officers has been paid by the Company
to date. The officers and directors of the Company are reimbursed for
out-of-pocket expenses incurred on the Company's behalf. Beginning January 1,
2000, Mr. Vesperman, as an employee of the Company, will be compensated in the
amount of Two Thousand Five Hundred ($2,500.00) Dollars per month; and, also
beginning January 1, 2000, Mr. Zelenka, as an employee of the Company, will be
compensated in the amount of Five Hundred ($500.00) Dollars per month.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
As aforesaid, the Company neither owns nor leases any real property. Office
services are provided without charge by Gary C. Vesperman, the President and
Director of the Company.
The Company's principal place of business is comprised of 250 square feet of
operating space located at 3123 Trueno Road, Henderson, Nevada, 89014. As
aforesaid, these accommodations are currently being provided to the Company,
without charge, by Gary C. Vesperman.
In addition, Messrs. Vesperman and Zelenka are providing their services without
charge to the Company until December 31, 1999. Beginning January 1, 2000, the
Company intends to compensate Messrs. Vesperman and Zelenka as follows:
- Mr. Vesperman, as an employee of the Company, will be compensated in
the amount of Two Thousand Five Hundred ($2,500.00) Dollars per month;
and
- Mr. Zelenka, as an employee of the Company, will be compensated in the
amount of Five Hundred ($500.00) Dollars per month.
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At this time, there are no additional relationships or related transactions to
be reported.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's common stock is not listed for trading at this time. There are 37
record owners of the Company's stock. The Company has never paid a cash dividend
and has no present intention of doing so in the foreseeable future.
On September 22, 1998, the Company filed a 15c211 with the National Association
of Securities Dealers, Inc., in order for the Company to be listed on the
Over-The-Counter Bulletin Board.
On January 14, 1999, the National Association of Securities Dealers, Inc., sent
notice to the Company that in order to be listed on the Over-The-Counter
Bulletin Board, the Company had to comply with NASD Rules 6530 and 6540. The
Company's compliance with such Rules is a work in progress and is expected to be
completed shortly.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
The following sales of unregistered Company Securities (Common Stock), were
issued in accordance with certain exemptions from registration made available by
the Federal Securities Laws. The exemption or exemptions utilized and relied
upon by the Company in its offer and/or sale of certain unregistered Company
Securities are provided by the Securities Act of 1933, as amended and as
promulgated by the United States Securities and Exchange Commission (hereinafter
"the Act"), and contained in sections 3(b) and/or 4(2) thereof. In addition,
certain other exemptions from registration provided in Subsection 11 of Section
90.530 of the Nevada Revised Statutes pertaining to the offer and/or sale of
unregistered Securities was relied upon by the Company.
On Oct. 18, 1986, Gary C. Vesperman, President and Founder, received 6,000
shares of Common Stock for organizational costs.
On January 13, 1998, Mr. Vesperman purchased 94,000 additional shares at
$0.06742 per share, or, $6,331.58.
On January 13, 1998, Mr. Zelenka purchased 94,000 additional shares at $0.06742
per share, or, $6,742.11.
On July 7, 1998, the Company completed its offering of 600,000 shares of common
stock which was made pursuant to Rule 504 of Regulation D. The company sold
stock to 28 individuals, and received gross proceeds of $30,000.
<PAGE> 12
In addition, on or about February 21, 1998, Mr. Vesperman gifted a total of 700
shares to his sister, nephews, and nieces. He retains no voting control over
those shares. All such sales or transfers were made in reliance upon the
exemption from registration provided by Section 4 of the Securities Act of 1933
as amended.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance of 50,000,000
shares of Common Stock, of which 800,000 are issued and outstanding. The shares
are non-assessable, without preemptive rights, and do not carry cumulative
voting rights. Holders of common shares are entitled to one vote for each share
on all matters to be voted on by the stockholders. The shares are fully paid,
non-assessable, without preemptive rights, and do not carry cumulative voting
rights. Holders of common shares are entitled to share ratably in dividends, if
any, as may be declared by the Company from time-to-time, from funds legally
available. In the event of a liquidation, dissolution, or winding up of the
Company, the holders of shares of common stock are entitled to share on a
prorata basis all assets remaining after payment in full of all liabilities.
Shares Eligible for Future Sale
Of the issued and outstanding shares, 200,000 are subject to resale restrictions
and, unless registered under the Securities Act of 1933 (the "Act") or exempted
under another provision of the Act, will be ineligible for sale in the public
market. Sales may be made after two years from their acquisition in accordance
with Rule 144 promulgated under the Act.
In general, Rule 144 permits a person (or persons whose shares are aggregated)
who has beneficially owned shares that were acquired privately (either directly
from the Company or from an Affiliate of the Company) for at least one year, or
who is an Affiliate of the Company, to sell within any three-month period, a
number of such shares that does not exceed the greater of 1% of the then
outstanding shares of the Company's Common Stock (approximately 8,000 as of the
date of this statement) or the average weekly trading volume in the Company's
common stock during the four calendar weeks immediately preceding such sale.
Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements, and the availability of current public information about
the Company. A person (or persons whose shares are aggregated) who is not deemed
to have been an Affiliate at any time during the 90 days preceding a sale, and
who has beneficially owned shares for at least two years, is entitled to sell
all such shares under Rule 144 without regard to the volume limitations, current
public information requirements, manner of sale provisions, or notice
requirements. Sales of substantial amounts of the Common Stock of the Company in
the public market could affect prevailing market prices adversely.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its shareholders for errors
in judgment or other acts, or omissions not amounting to intentional misconduct,
fraud or a knowing violation of the law,
<PAGE> 13
since provisions have been made in the Articles of incorporation and Bylaws
limiting such liability. The Articles of Incorporation and Bylaws also provide
for indemnification of the officers and directors of the Company in most cases
for any liability suffered by them or arising from their activities as officers
and directors of the Company if they were not engaged in intentional misconduct,
fraud or a knowing violation of the law. Therefore, purchasers of these
securities may have a more limited right of action than they would have except
for this limitation in the Articles of Incorporation and Bylaws.
The officers and directors of the Company are accountable to the Company as
fiduciaries, which means such officers and directors are required to exercise
good faith and integrity in handling the Company's affairs. A shareholder may be
able to institute legal action on behalf of himself and all others similarly
stated shareholders to recover damages where the Company has failed or refused
to observe the law.
Shareholders may, subject to applicable rules of civil procedure, be able to
bring a class action or derivative suit to enforce their rights, including
rights under certain federal and state securities laws and regulations.
Shareholders who have suffered losses in connection with the purchase or sale of
their interest in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of the proceeds
from the sale of these securities, may be able to recover such losses from the
Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this Item 13 follow
the index of financial statements appearing at Item 15 of this Form 10SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company's previous auditor was Bradford & Bradford P.C., CPA. The Company
decided to use Kurt D. Saliger, CPA, to conduct its most recent audit. This
change was made merely for the convenience of the Company, and there was no
disagreement with Bradford & Bradford that led the Company to make this change.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Bradford & Bradford, P.C. dated March 10, 1998,
and Kurt D. Saliger, C.P.A, dated July 10, 1998, March 24, 1999, and August 26,
1999.
Balance Sheet as of December 31, 1997, January 13, 1998, July 7, 1998, December
31, 1998, and June 30, 1999.
Statement of Operation for the year ended 1996, 1997, and 1998.
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Statement of Operations from January 1, 1999, through June 30, 1999.
Statement of Stockholders' Equity for the year ended 1996, 1997 and 1998.
Statement of Stockholders' Equity from January 1, 1999, through June 30, 1999.
Statement of Cash Flows for the years ended 1996, 1997 and 1998. Statement of
Cash Flows from January 1, 1999, through June 30, 1999.
Notes to Financial Statements
EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No.
- -------
<S> <C>
3(i) Articles of Incorporation of Hiking Adventures, Inc.
3(ii) By-Laws of Hiking Adventures, Inc.
10 Material Contract between Hiking Adventures, Inc., and Business Concepts, Inc.
16 Letter regarding Change of Certifying Accountant.
23 Consents of Experts $ Counsel
24 Opinion of Counsel
99 Hiking Adventures, Inc.'s Plan of Operation for Fiscal Year Beginning July 1, 1999,
through June 30, 2000
27 Financial Data Schedule
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Hiking Adventures, Inc.
By: /s/ GARY C. VESPERMAN
------------------------------------
Gary C. Vesperman
<PAGE> 15
INDEPENDENT AUDITORS REPORT
Board of Directors
Hiking Adventures, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of Hiking Adventures, Inc. (a
development stage company), as of June 30, 1999; and the related statement of
operations, stockholders equity and cash flows for the period ended June 30,
1999. These financial statements are the responsibility of the Companys
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hiking Adventures, Inc. at
June 30, 1999; and the results of their operations and their cash flows for the
period ended June 30, 1999 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has had no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Managements plan in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ KURT D. SALIGER
- ----------------------
Kurt D. Saliger C.P.A.
Las Vegas, Nevada
August 26, 1999
<PAGE> 16
HIKING ADVENTURES, INC.
A Development Stage Company
BALANCE SHEET
JUNE 30, 1999
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS
<S> <C>
Cash $40,785
Accounts Receivable 0
TOTAL CURRENT ASSETS 40,785
PROPERTY AND EQUIPMENT, NET 1,200
ORGANIZATION COSTS, NET 186
-------
TOTAL ASSETS $42,171
=======
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ 3,550
Deferred Income 15,000
-------
TOTAL CURRENT LIABILITIES $18,550
=======
STOCKHOLDERS EQUITY
Common Stock, $.001 par value
authorized 50,000,000 shares;
issued and outstanding at
June 30, 1999 800,000 shares 800
Additional Paid In Capital 44,192
Deficit Accumulated During
Development Stage (21,371)
-------
TOTAL STOCKHOLDERS EQUITY $23,621
=======
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $42,171
=======
</TABLE>
See accompanying notes to financial statements.
<PAGE> 17
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
October 7, 1996
January 1, 1999 (Inception)
to June 30, 1999 to June 30, 1999
---------------- ----------------
<S> <C> <C>
Revenue $ 0 $ 16,888
-------- --------
TOTAL INCOME $ 0 $ 16,888
======== ========
EXPENSES
General and Administrative $ 4,847 $ 37,728
Amortization & depreciation 192 531
-------- --------
TOTAL EXPENSES 5,039 $ 38,259
-------- --------
NET PROFIT (LOSS) $ (5,039) $(21,371)
======== ========
NET PROFIT (LOSS)
PER SHARE $(0.0063) ($0.0267)
======== ========
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING 800,000 800,000
======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 18
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
June 30, 1999
<TABLE>
<CAPTION>
Common Stock (Deficit)
----------------------- Accumulated
Number Additional During
of Paid In Development
Shares Amount Capital Stage
------ ------ ---------- -----------
<S> <C> <C> <C> <C>
October 18,1996 issued for cash (Note 2) 6,000 $ 6 $ 407
Net Income, 10-18-96 (inception) to 12-31-96 $ (21)
------- ---- ------- --------
Balance, Dec. 31, 1996 6,000 6 407 (21)
Net (Loss), 12-31-97 (84)
------- ---- ------- --------
Balance, Dec. 31, 1997 6,000 6 407 (105)
January 13, 1998 issued for cash (Note 2) 194,000 194 12,885
July 7, 1998 issued for cash (Note 2) 600,000 600 29,400
July 7, 1998 computer issued to company 1,500
Net (Loss), 12-31-98 (16,227)
Net (Loss), 06-30-99 (5,039)
------- ---- ------- --------
Balance June 30, 1999 800,000 $800 $44,192 $(21,371)
======= ==== ======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE> 19
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
October 7, 1996
January 1, 1999 (Inception)
to June 30, 1999 to June 30, 1999
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM FROM OPERATING ACTIVITIES
Net Income (Loss) $ (5,039) $(21,371)
Amortization & depreciation 190 527
Accounts Receivable decrease 0 0
Accounts Payable increase 3,550 3,550
Deferred Income increase 15,000 15,000
-------- --------
CASH FLOWS FROM FROM OPERATING ACTIVITIES 13,701 (2,294)
Issue Common Stock 0 43,079
Additional Paid In Capital 0 0
-------- --------
Net increase
(decrease) in Cash 13,701 40,785
Cash Beginning of Period 27,084 0
Cash
-------- --------
June 30, 1999 $ 40,785 $ 40,785
======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 20
HIKING ADVENTURES, INC.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was organized October 7, 1996 under the corporate laws of the
State of Nevada, as Hiking Adventures, Inc. (the Company). The Company is
primarily a development stage company in accordance with SFAS #7, and has
no operations. The Company is in the business of publishing and marketing a
collection of hiking trail guides. The Company also plans to research the
feasibility and marketing appeal of electronically providing hiking
information services to hikers.
On July 7, 1998, the Company successfully completed an offering of its
common stock under Regulation D, Rule 504 of the Securities Act of 1933 for
600,000 common shares of stock at $0.001 per share for $30,000.
The Company has not determined its accounting policies and procedures,
except as follows:
1. The Company uses the accrual method of accounting.
2. Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS No. 128), Earnings Per Share.
Basic loss per share is computed by dividing losses available to common
stockholders by the weighted average number of common shares outstanding
during the period. Diluted loss per share reflects per share amounts that
would have resulted if dilutive common stock equivalents had been converted
to common stock. No stock options were available or granted during the
periods presented. Accordingly, basic and diluted loss per share are the
same for all periods presented.
3. Organization costs of $415 are being amortized over a period of sixty
(60) months commencing October 18, 1996.
4. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
NOTE 2 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the Company has no current source
of revenue. Without realization of additional capital, it would be unlikely
for the Company to continue as a going concern. Please see the deferred
income note #5 and management's financial plan of operations incorporated
herein as note #6.
<PAGE> 21
As of the period reflected in this financial statement, the Company had no
current source of revenue. However, the Company's accountant has been
advised that the Company has entered into an agreement with Business
Concepts, Inc., for the publication and sale of 60,000 Hiking Guide Books
over the next 18 months. (See note #5 - Deferred Income.) This infusion of
capital should, in all likelihood, provide the Company with sufficient
capital necessary to operate and be characterized as a going concern by
realizing assets and liquidating liabilities in the normal course of
business. In this regard, the Company maintains sufficient cash on had to
meet its publication obligations pursuant to the agreement.
In the event that Business Concepts, Inc. is unable to meet its obligations
under the agreement, then it would be unlikely for the Company to continue
as a going concern. The Company has informed its accountant that in the
event Business Concepts, Inc. is unable to meet its obligations under the
agreement, the Company will seek an infusion of additional capital through
sale of stock.
NOTE 4 - RELATED PARTY TRANSACTION
The Company neither owns or leases any real property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly have not been reflected therein. The
officers and directors of the Company are involved in other business
activities, and may, in the future, become active in other business
activities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their own
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 5 - DEFERRED INCOME
The Company has entered into an agreement with Business Concepts, Inc. to
sell them over 60,000 hiking guide books over the next (18) eighteen
months. On June 30, 1999 Business Concepts, Inc. paid an initial payment of
$15,000 to be applied to a future shipment of hiking guide books expected
to be published around August 1, 1999. The total value of the business
agreement in total sales should approximate $177,000 for the 60,000 guide
books. The initial $15,000 payment is classified as deferred income on the
financial statements.
NOTE 6 - MANAGEMENT'S PLAN OF OPERATIONS
HIKING ADVENTURES, INC.
PLAN OF OPERATIONS
For Fiscal Year beginning July 1, 1999 and ending June 30, 2000.
RESULTS OF OPERATION
The Company's Results of Operations prior to July 1999 are reflected in the
accompanying Independent Auditor's Report.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1999, the Company's current assets were $27,291 and its
current liabilities were $0.00 The current assets exceeded
<PAGE> 22
current liabilities by $27,291. As of August 1999, the first delivery of
hiking guides under an Agreement dated June 10, 1999 attached as reference
to the Registration Statement as Exhibit 10, the Company will be considered
a going concern. A going concern, by its terms, contemplates the
realization of assets and liquidation of liabilities in the normal course
of business.
Total assets are expected to significantly increase as a result of an
Agreement, dated June 10, 1999, to $121,825.80 over the base contract
period July 1999 through June 2000. (This asset projection includes no
assumptions based on other potential operations considered by the company).
Total liabilities are expected to remain at $0.00.
Stockholders' equity (deficit) of ($17,701) accumulated during development
stage should not increase over the next twelve (12) months. To increase its
capital position and begin operations, the Company entered into a contract
(Agreement) with Business Concepts, Inc., a Nevada Corporation, dated June
10, 1999. (See Exhibit 10 to Registration Statement.)
A significant, albeit estimated, commitment for the Company during the next
twelve (12) months will be the publishing and delivery of 60,000 hiking
guides. Other significant commitments for the Company will be to establish
a Company web-site on the Internet providing information services and
guides to hikers.
From August 1, 1999, through the sixteen (16) months ending November 1,
2000, management believes that the Company can satisfy its cash
requirements. In the event that Business Concepts, Inc., is unable to meet
its obligations under the terms of the Agreement, the Company anticipates
that it will raise additional operating capital, as needed, by stock sales.
Management does not anticipate any purchases or sales of plant and/or
significant equipment, nor does management expect any significant changes
in the number of its employees.
There are currently no required allocations for compliance with
environmental regulations.
EMPLOYEES
The Company currently employs two people. The Company's President devotes
40% of his time to Company affairs and the Company's Secretary/Treasurer
devotes 10% of his time to further the Company's objectives and business
plan.
MANAGEMENT'S PLAN OF OPERATION
The Company's plan of operation for the next three years is to expand
operations, subject to availability of capital, by printing 11 additional
hiking guides covering the West Coast and expanding subscriber
participation via the Internet. To accomplish this objective the Company
intends to retain the services of seasoned Internet business professionals,
including web-page designers. With current Internet usage statistics along
with the growth associated therewith, the Company believes that it will be
provided with an avenue for expansion into markets that the Company's
capitalization
<PAGE> 23
would not have allowed them to previously reach absent Internet technology.
The Company believes that through such a means, expansion without debt
service may be possible.
The Company is in the process of expanding by initiating development of its
web-page, which is expected to be placed on all major Internet search
engines. This will allow the Company's target market access to a web-site
that provides information and hiking guides for many regional recreational
areas.
The Company plans on acquiring, subject to availability of capital, new
computer equipment which should streamline, accelerate and increase the
capacity for marketing hiking guides and associated editorial matter
regarding many vacation markets to hikers around the globe.
THE COMPANY
The proposed business of the Company is to provide hiking guides. From
inception through the date of the Agreement, the Company conducted no
business other than organizational activities.
As of January 13, 1998, the Officers had each purchased 100,000 shares of
common stock for a total consideration of $13,494. The Company on that date
had 200,000 issued and outstanding shares.
On July 6, 1998, the Company completed a Regulation D 504 offering for
$30,000 (600,000 shares). Accordingly, the total issued and outstanding
shares rose to 800,000.
On April 8, 1999, the Company filed Registration Statement on Form 10-SB.
On June 10, 1999, the Company entered into an Agreement with Business
Concepts Incorporated, a Nevada Corporation. On June 30, 1999, Business
Concepts, Inc., made an initial payment of $15,000 to be applied to a
future shipment of hiking guides expected to be published on or about
August 1, 1999. (See Note 5 - Audited Financial Statements dated June 30,
1999.) The essential terms of the Agreement are contained in Exhibit 10 to
the Registration Statement.
MILESTONES
The Company is currently in the development stage and expects to reach
milestones more fully set forth below. The Company currently has a contract
to deliver the three distinct guides.
COMPLETION
Complete first guide, print, and deliver August 1, 1999
Begin Online Sales (web-site) September 15, 1999
Complete second guide, print, and deliver October 1, 1999
Complete third guide, print, and deliver December 1, 1999
Begin Compensation plan for officers and acquire offices other than
currently provided by President January 1, 2000
<PAGE> 24
In the event that the Company is unable to achieve the certain milestones
and fulfill the Agreement dated June 10, 1999, the Company could suffer
severe cash flow problems and may cease at that point to be a viable
commercial entity.
WORKING CAPITAL REQUIREMENTS
The Company does not anticipate having any cash flow or liquidity problems
over the fiscal period covered by the Agreement dated June 10, 1999.
The Company is not in default or in breach of any note, loan, lease or
other indebtedness or financing arrangement requiring the Company to make
payments. There are no trade payables. The Company is not subject to any
unsatisfied judgments, liens or settlement obligations.
RISK FACTORS FORESEEN BY MANAGEMENT
A SUCCESS OF BUSINESS - The Company may not be successful in its effort
to further its business. Even if the Company were to successfully meet the
goals set forth in its business plan, such goals may not be achieved within
the time frames set forth. The limited extent of the Company's assets and
the Company's stage of development as well as the Company's limited
operating history make it subject to the risks associated with start-up
companies.
B MANAGEMENT - The Company's present management structure, although
adequate for the early stage of its operations, will likely require
significant augmentation as operations commence and expand. The Company's
ability to recruit and retain capable and effective individuals is unknown,
although there appear to be many such people within the industry worldwide.
C COMPETITION - The Company intends to enter into markets, which are
relatively new and are, therefore, difficult to predict in terms of the
level of demand for the Company's product and services. In addition, such
markets are or likely will be subject to intense competition from both
private and public businesses nationally and/or around the world, many of
who have greater financial and technical resources than the Company. Such
competition as well as any future competition may adversely affect the
Company's success in the marketplace. There can be no assurance that the
Company will be able to successfully compete in such a highly competitive
marketplace.
D FINANCIAL ASSUMPTIONS - The Company will rely on internally prepared
forecasted financial statements, which are predicated on certain
assumptions, including assumptions of revenue and expense and the
occurrence of certain future events, which in turn were based on
management's considered assessment of prevailing conditions and
management's best estimates of future events. Should, for example the
Company's actual costs exceed the assumed levels, then the impact on the
Company's projected profits would be adverse. In the final analysis, any
return to an investor in the Company will in large part be determined by
management's ability to execute the Company's plan as projected, and there
can be no assurances of success provided.
E PUBLIC MARKET - There is not now, and there may never be, a public
market of any kind for the securities issued by the Company. There
<PAGE> 25
is no assurance that the price of the Company's shares in any market, which
may develop will be greater than the offering price. As a result of these
factors, holders of the Company's Common Stock may not be able to liquidate
their investment.
F PENNY STOCK - The Company's securities may be deemed a penny stock, as
defined by Rule 3a51-1 of the Securities and Exchange Act of 1934, as
amended. Such as designation could have a material adverse effect on the
development of the public market for shares of the Company's common stock
or, if such a market develops, its continuation, since broker-dealers are
required to personally determine whether an investment in any security is
suitable for customers prior to any solicitation of any offer to purchase
these securities. Compliance with procedures relating to sale by
broker-dealers of A penny stocks may make it more difficult for purchasers
of the Company's common stock to resell their shares to third parties or to
otherwise dispose of such shares.
G ABILITY TO RAISE ADDITIONAL CAPITAL - The Company at this time does
not anticipate the necessity for any additional capital, but if additional
funds for expansion and/or growth are not available, the investors may lose
their entire investment. Additional financing may come in the form of
securities offerings or from bank financing. If additional shares are
issued to raise capital, existing shareholders will suffer a dilution of
their stock ownership in the Company, however, the book value of their
shares should not be diluted, provided additional shares are sold at a
price greater then that paid by the shareholder.
H POTENTIAL CONFLICTS OF INTEREST - There are various interrelationships
between the officers and directors of the company, which create conflicts
of interest that might be detrimental to the Company. The officers and
directors will not be able to devote full time to the affairs of the
company as each has other business interests to which they devote some of
their time.
I NO FORESEEABLE DIVIDENDS - The Company does not anticipate paying any
dividends on its Common Stock in the foreseeable future.
J INTELLECTUAL PROPERTY - The Company does not have any patents for its
technology and there can be no assurance that the Company will be able to
protect its proprietary rights from use by its competitors. The commercial
success of the Company may also depend upon its products and services not
infringing any intellectual property rights of others and upon no such
claims of infringement being made.
K CURRENT TECHNOLOGY - The technology necessary to create a service such
as the one the Company will be offering exists today and is readily
accessible, therefore, there is an ease of entry and exit for would-be
competitors.
L INTERNET - Use of the Internet by consumers is at a very early stage
of development, and market acceptance of the Internet as a medium is
subject to a high level of uncertainty. The company expects to experience
significant fluctuations in operating results in future periods due to a
variety of factors, including, but not limited to, (i) market acceptance of
the Internet as a medium for consumers, (ii) the Company's ability to
create and deliver Internet content in order
<PAGE> 26
to attract users to its web-sites to purchase its product and/or services,
and to attract advertisers to it web-sites, (iii) there can be no assurance
that the Company's content will be attractive to a sufficient number of
users to generate significant revenues, (iv) intense competition from other
providers of related content over the Internet, (v) delays or errors in the
Company's ability to effect electronic commerce transactions, (vi) the
Company's ability to upgrade and develop its systems and infrastructure in
a timely and effective manner (vii) technical difficulties, system downtime
or Internet brownouts, (viii) the Company's ability to attract customers at
a steady rate and maintain customer satisfaction, (ix) seasonality of the
industry, (x) seasonality of advertising sales, (xi) Company promotions and
sales programs, (xii) the amount and timing of operating costs and capital
expenditures relating to expansion of the Company's business, operations
and infrastructure and the implementation of marketing programs, key
agreements and strategic alliances, (xiii) the level of returns experienced
by the Company; and (xiv) general economic conditions and economic
conditions specific to the Internet.
Note: In addition to the above risks, businesses are often subject to risks
not foreseen or fully appreciated by management. In reviewing this filing,
potential investors should keep in mind other possible risks that could be
important.
<PAGE> 27
BRADFORD & BRADFORD, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
34415 EASTERN AVENUE
LAS VEGAS, NEVADA 89109
Board of Directors
Hiking Adventures. Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Hiking Adventures, Inc. (a
Development Stage Company) as of January 13, 1998, and the related statements of
operations, shareholders equity and cash flows for the periods from October 18,
1996 (inception) to January 13, 1998. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hiking Adventures, Inc. (a
Development Stage Company) as of January 13, 1998, and the results of its
operations and cash flows for the periods from October 18, 1996 (inception) to
January 13, 1998, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has had no operations and has no established source of
revenue. This raises substantial doubt about its ability to continue as a going
concern. Managements plan in regards to these matters are also described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/
March 10, 1998
<PAGE> 28
HIKING ADVENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JANUARY 13, 1998
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash and interest bearing deposits $ 40
Other assets 13,302
--------
TOTAL ASSETS $ 13,342
========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Current liabilities $ 0
Total current liabilities $ 0
Shareholders equity
Common stock ($.001 par value,
50,000,000 shares authorized,
200,000 shares issued and outstanding) 200
Additional paid-in capital 13,294
Deficit accumulated during development stage (152)
Total shareholders equity
--------
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $ 13,342
========
</TABLE>
SEE INDEPENDENT AUDITORS REPORT AND ACCOMPANYING NOTES
<PAGE> 29
HIKING ADVENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIODS OCTOBER 18, 1996 (INCEPTION) THROUGH JANUARY 13,1998
<TABLE>
<CAPTION>
Inception through Year ended Period ended
December 31, 1996 December 31, 1997 January 13. 1998
----------------- ----------------- ----------------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
EXPENSES
Amortization 21 84 7
Bank charges 0 0 40
--------- --------- ---------
Net loss $ (21) $ (84) $ (47)
Weighted number of
shares outstanding 6,000 6,000 200,000
Net loss per share $ .0035 $ .014 $ .0002
</TABLE>
SEE INDEPENDENT AUDITORS REPORT AND ACCOMPANYING NOTES
<PAGE> 30
HIKING ADVENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF SHAREHOLDERS EQUITY
FOR THE PERIODS OCTOBER 18,1996 (INCEPTION) THROUGH JANUARY 13, 1998
<TABLE>
<CAPTION>
NUMBER OF ADDITIONAL
COMMON COMMON PAID IN ACCUMULATED
SHARES STOCK CAPITAL DEFICIT TOTAL
--------- -------- ---------- ----------- --------
<C> <C> <C> <C> <C> <C>
EQUITY
October 18, 1996,
Common shares issued
for cash. Par value
$.001 per share 6,000 $ 6 $ 409 $ 0 $ 415
Net loss, December 31. 1996 0 0 0 (21) (21)
Balance, December 31. 1996 6,000 6 409 (21) 394
Net loss, December 31, 1997 0 0 0 (84) (84)
Balance, December 31. 1997 6,000 6 409 (105) 310
January 13, 1998,
Common shares issued
for cash. Par value
$.001 per share 194,000 194 12,885 0 13,079
------- -------- -------- -------- --------
Net loss, January 13, 1998 0 0 0 (47) (47)
------- -------- -------- -------- --------
200,000 $ 200 $ 13,294 $ (152) $ 13,342
======= ======== ======== ======== ========
</TABLE>
SEE INDEPENDENT AUDITORS REPORT AND ACCOMPANYING NOTES
<PAGE> 31
HIKING ADVENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIODS OCTOBER 18,1996 (INCEPTION) THROUGH JANUARY 13. 1998
<TABLE>
<CAPTION>
Inception through Year ended Period ended
December 31, 1996 December 31, 1997 January 13. 1998
----------------- ----------------- ----------------
<S> <C> <C> <C>
Cash flows from operation activities
Net loss $ (21) $ (84) $ (47)
Amortization expense 21 84 7
Increase in other assets (415) 0 (12,999)
-------- -------- --------
Net cash used by operating activities (415) 0 (13,039)
Cash flows from financing activities:
Proceeds from issuance
of common stock 415 0 13,079
-------- -------- --------
Net cash provided by financing activities 415 0 13,079
Net increase in cash and
interest bearing deposits 0 0 40
-------- -------- --------
Cash and interest bearing deposits
Beginning balance 0 0 0
-------- -------- --------
Ending balance 0 0 40
======== ======== ========
</TABLE>
SEE INDEPENDENT AUDITORS REPORT AND ACCOMPANYING NOTES
<PAGE> 32
HIKING ADVENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS OCTOBER 18,1996 (INCEPTION) THROUGH JANUARY 13. 1998
1. Summary of significant accounting policies
Organization - Hiking Adventures, Inc. is a corporation formed in the state
of Nevada in October 1996, which produces hiking catalogs. The Company has
no operations and in accordance with SFAS #7, is considered a development
stage company.
Accounting method - The Company uses the accrual method of accounting.
Organization costs - Organization costs, consist of incorporation fees and
consulting regarding the Company's initial public offering, and are being
amortized over a periods of sixty (60) months.
Net loss per share - Net loss per share is calculated using the weighted
average number of shares of common stock outstanding.
Fair value of financial instruments - The carrying amount of cash
approximates the fair value because of the short maturity of this
instrument.
2. Going concern
The company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the Company has no current source
of revenue. Without realization of additional capital, it would be unlikely
for the Company to continue as a going concern.
3. Common stock
Issued common stock consists of the following:
<TABLE>
<CAPTION>
Shareholder No. of shares Date receive
----------- ------------- ------------
<S> <C> <C>
Gary C. Vesperman 6,000 10/18/96
Gary C. Vesperman 94,000 1/13/98
Timothy J. Zelenka 100,000 1/13/98
</TABLE>
4. Warrants and options
There are no warrants or options outstanding to acquire any additional
shares of common stock.
SEE INDEPENDENT AUDITORS REPORT
<PAGE> 33
HIKING ADVENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS OCTOBER 18, 1996 (INCEPTION) THROUGH JANUARY 13, 1998
5. RELATED PARTY TRANSACTION
The Company neither owns or leases any real property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities, and may. in the future, become involved in another business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their own
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
6. COMMITMENTS AND CONTINGENCIES
The Company plans to file a Regulation D504 with the State of Nevada for
the sale of shares of common stock. The number of shares to be issued has
not yet been determined.
SEE INDEPENDENT AUDITORS REPORT
<PAGE> 34
HIKING ADVENTURES, INC.
FINANCIAL STATEMENTS
JULY 7, 1998
<PAGE> 35
KURT D. SALIGER, C.P.A.
Certified Public Accountant
Member American Institute of Certified Public Accountants
Member Nevada Society of Certified Public Accountants
INDEPENDENT AUDITORS REPORT
Board of Directors
Hiking Adventures, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of Hiking Adventures, Inc. (a
development stage company), as of July 7, 1998, and the related statements of
operations, stockholders equity and cash flows for the period from January 1,
1998 to July 7, 1998. These financial statements are the responsibility of the
Companys management. My responsibility is to express an opinion on these
financial statements based on my audit in accordance with standards established
by the American Institute of Certified Public Accountants.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hiking Adventures, Inc. as
of July 7, 1998 and the results of their operations and their cash flows for the
period from January 1, 1998 to July 7, 1998 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has had no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Managements plan in regard to these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ KURT D. SALIGER
- ----------------------------------
Kurt D. Saliger C.P.A.
July 10, 1998
2950 So. Rainbow Blvd., Suite 260, Las Vegas, Nevada 89102
Phone: (702) 367-1988 Fax: (702) 365-6099
<PAGE> 36
HIKING ADVENTURES, INC.
A Development Stage Company
BALANCE SHEET
July 7, 1998
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS
<S> <C>
Cash $ 32,654
Accounts Receivable 0
--------
TOTAL CURRENT ASSETS $ 32,654
OTHER ASSETS
Organization Costs $ 415
Less: Accumulated Amortization ($ 147)
--------
TOTAL OTHER ASSETS $ 268
--------
TOTAL ASSETS $ 32,922
========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ 200
--------
TOTAL CURRENT LIABILITIES $ 200
LONG-TERM DEBT $ 0
STOCKHOLDERS EQUITY
Common Stock, $.001 par value
authorized 50,000,000 shares
issued and outstanding at July 7, 1998
800,000 shares $ 800
Additional Paid In Capital $ 42,694
Deficit Accumulated
During Development Stage ($10,772)
--------
TOTAL STOCKHOLDERS EQUITY $ 32,722
--------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 32,922
========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 37
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF OPERATIONS
January 1, 1998 to July 7, 1998
<TABLE>
<CAPTION>
INCOME
<S> <C>
Revenue $ 16,288
---------
TOTAL INCOME $ 16,288
EXPENSES
Amortization $ 42
General and Administrative $ 26,913
---------
TOTAL EXPENSES $ 26,955
---------
NET PROFIT (LOSS) $ (10,667)
=========
NET PROFIT (LOSS)
PER SHARE $ (0.0133)
=========
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING 800,000
=========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 38
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF STOCKHOLDERS EQUITY
July 7, 1998
<TABLE>
<CAPTION>
Common Stock (Deficit)
------------------------ Accumulated
Number Additional During
Of Paid In Development
Shares Amount Capital Stage
------- ------ ----------- --------------
<S> <C> <C> <C> <C>
Balance
December 31 1997 6,000 $ 0 $409 $ (105)
Issued for cash
January 13, 1998 194,000 $ 194 $12,885
Issued for cash
July 7, 1998 600,000 $ 600 $29,400
(Net Loss) January 1,
1998 to July 7, 1998 $(10,667)
------- ------ ------- --------
Balance July 7, 1998 800,000 $ 800 $31,500 $(10,772)
======= ====== ======= ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 39
HIKING ADVENTURES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
January 1, 1998 to July 7, 1998
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C>
Net Income (Loss) $(10,667)
Amortization $ 42
Increase in accounts payable $ 200
========
Net Cash (Used) In
Operating Activity $(10,425)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash $ 43,079
--------
Net increase in cash $ 32,654
Cash, January 1, 1998 $ 0
--------
Cash, July 7, 1998 $ 32,654
</TABLE>
See accompanying notes to financial statements.
<PAGE> 40
HIKING ADVENTURES, INC.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
July 7, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was organized October 7, 1996 under the corporate laws of
the State of Nevada, as Hiking Adventures, Inc. (the Company). The Company is
primarily a development stage company in accordance with SFAS #7, and has no
operations.
On July 7, 1998, the Company successfully completed an offering of its
common stock under Regulation D, Rule 504 of the Securities Act of 1933 for
600,000 common shares of stock at $0.001 per share for $30,000.
The Company has not determined its accounting policies and procedures,
except as follows:
1. The Company uses the accrual method of accounting.
2. Earnings per share is computed using the weighted average number of
shares of common stock outstanding.
3. Organization costs of $415 are being amortized over a period of
sixty (60) months commencing October 18, 1998.
4. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern.
<PAGE> 41
HIKING ADVENTURES, INC.
A Development Stage Company
NOTES TO FINANCIAL STATEMENTS
July 7, 1998
NOTE 3 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 4 - RELATED PARTY TRANSACTION
The Company neither owns or leases any real property. Office services
are provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly have not been reflected therein. The
officers and directors of the Company are involved in other business activities,
and may, in the future, become active in other business activities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their own business interests. The
Company has not formulated a policy for the resolution of such conflicts.
<PAGE> 42
HIKING ADVENTURES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1997
DECEMBER 31, 1998
<PAGE> 43
KURT D. SALIGER, C.P.A.
Certified Public Accountant
Member American Institute of Certified Public Accountants
Member Nevada Society of Certified Public Accountants
INDEPENDENT AUDITORS REPORT
Board of Directors
Hiking Adventures, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheets of Hiking
Adventures, Inc. (a development stage company) as of December 31, 1998 and
1997, and the related statements of operations, changes in stockholders
equity and cash flows for each of the years in the period ended December
31, 1998. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with generally accepted
auditing standards. Those standards require that I plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audits provides
a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Hiking
Adventures, Inc. as of December 31, 1998 and 1997, and the results of their
operations and its cash flows for each of the two years in the period ended
December 31, 1998, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has had no operations and has no
established source of revenue. This raises substantial doubt about its
ability to continue as a going concern. Managements plan in regard to these
matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ KURT D. SALIGER
-----------------------
Kurt D. Saliger C.P.A.
March 24, 1999
5000 W. Oakey C Suite A-4 C Las Vegas, Nevada 89146
Phone: (702) 367-1988 Fax: (702) 870-8388
<PAGE> 44
HIKING ADVENTURES, INC.
A Development Stage Company
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 27,084 $ 0
Accounts Receivable $ 0 $ 0
-------- --------
TOTAL CURRENT ASSETS $ 27,084 $ 0
PROPERTY AND EQUIPMENT, NET $ 1,350 $ 0
OTHER ASSETS $ 228 $ 310
-------- --------
TOTAL ASSETS $ 28,662 $ 310
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ 0 $ 0
Accrued Liabilities $ 0 $ 0
Current Portion, Long Term Debt $ 0 $ 0
-------- --------
TOTAL CURRENT LIABILITIES $ 0 $ 0
LONG-TERM DEBT $ 0 $ 0
STOCKHOLDERS EQUITY
Common Stock, $.001 par value
authorized 50,000,000 shares;
issued and outstanding 6,000 and
800,000 shares, respectively $ 800 $ 6
Additional Paid In Capital $ 44,194 $ 409
Deficit Accumulated
During Development Stage $(16,332) $ (105)
-------- --------
TOTAL STOCKHOLDERS EQUITY $ 28,662 $ 310
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 28,662 $ 310
======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 45
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
REVENUES $ 16,888 $ 0
COSTS OF REVENUES $ 0 $ 0
--------- ---------
GROSS PROFIT $ 16,888 $ 0
OPERATING EXPENSES
Selling, general and
Administrative $ 32,883 $ 0
Amortization and depreciation $ 232 $ 84
--------- ---------
TOTAL OPERATING EXPENSES $ 33,115 $ 84
INCOME (LOSS) FROM OPERATIONS $ (16,227) $ (84)
OTHER INCOME (EXPENSES)
Gain on sale of assets $ 0 $ 0
Interest expense $ 0 $ 0
--------- ---------
INCOME (LOSS) BEFORE INCOME TAXES $ (16,227) $ (84)
Income Taxes $ 0 $ 0
--------- ---------
NET PROFIT (LOSS) $ (16,227) $ (84)
========= =========
NET PROFIT (LOSS)
PER SHARE $ (0.0203) $ (0.014)
========= =========
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING 800,000 6,000
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 46
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
December 31, 1998
<TABLE>
<CAPTION>
Common Stock (Deficit)
----------------------- Accumulated
Number Additional During
Of Paid In Development
Shares Amount Capital Stage
--------- -------- ----------- -----------
<S> <C> <C> <C> <C>
October 18, 1996
Issued for cash (Note 2) 6,000 $ 6 $ 409
Net Income, 10-18-96
(inception) to 12-31-96 $ (21)
--------- -------- --------- ---------
Balance Dec. 31, 1996 6,000 $ 6 $ 409 $ (21)
Net (Loss), 12-31-97 $ (84)
--------- -------- --------- ---------
Balance Dec. 31, 1997 6,000 $ 6 $ 409 $ (105)
January 13, 1998
Issued for cash (Note 2) 194,000 $ 194 $ 12,885
July 7, 1998
Issued for cash (Note 2) 600,000 $ 600 $ 29,400
July 7, 1998
Computer issued to company $ 1,500
(Net Loss), 12-31-98 $ (16,227)
--------- -------- --------- ---------
Balance December
31, 1998 800,000 $ 800 $ 31,500 $ (16,332)
========= ======== ========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE> 47
HIKING ADVENTURES, INC.
A Development Stage Company
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
January 1 January 1 October 7,1996
to to (inception)to
December 31, 1997 December 31, 1997 December 31,1997
----------------- ----------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM
FROM OPERATING ACTIVITIES
Net (Loss) $ (84) $(16,227) $(16,332)
Amortization and depreciation $ 84 $ 232 $ 337
Accounts Payable $ 0 $ 0 $ 0
-------- -------- --------
CASH FLOWS FROM
FROM OPERATING ACTIVITIES $ 0 $(15,995) $(15,995)
Issue common stock $ 0 $ 43,079 $ 43,079
Treasury stock $ 0 $ 0 $ 0
-------- -------- --------
Net increase
(decrease) in cash $ 0 $ 27,084 $ 27,084
Cash, Beginning
of Period $ 0 $ 0 $ 0
Cash, End -------- -------- --------
of Period $ 0 $ 27,084 $ 27,084
======== ======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 48
HIKING ADVENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was organized October 7, 1996 under the corporate laws of
the State of Nevada, as Hiking Adventures, Inc. (the Company). The Company is
primarily a development stage company in accordance with SFAS #7, and has no
operations. The Company is in the business of publishing and marketing a
collection of hiking trail guides. The Company also plans to research the
feasibility and marketing appeal of electronically providing hiking information
services to hikers.
On July 7, 1998, the Company successfully completed an offering of its
common stock under Regulation D, Rule 504 of the Securities Act of 1933 for
600,000 common shares of stock at $0.001 per share for $30,000.
The Company has not determined its accounting policies and procedures,
except as follows:
1. The Company uses the accrual method of accounting.
2. Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS No. 128) Earnings Per Share. Basic
loss per share is computed by dividing losses available to common stockholders
by the weighted average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would have resulted if
dilutive common stock equivalents had been converted to common stock. No stock
options were available or granted during the periods presented. Accordingly,
basic and diluted loss per share are the same for all periods presented.
3. Organization costs of $415 are being amortized over a period of
sixty (60) months commencing October 18, 1996.
4. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
<PAGE> 49
HIKING ADVENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern.
NOTE 3 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 4 - RELATED PARTY TRANSACTION
The Company neither owns or leases any real property. Office services
are provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly have not been reflected therein. The
officers and directors of the Company are involved in other business activities,
and may, in the future, become active in other business activities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their own business interests. The
Company has not formulated a policy for the resolution of such conflicts.
<PAGE> 50
Patrick C. Clary, Chartered
520 South Fourth Street, Suite 360
Las Vegas, Nevada 89101
August 27, 1999
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Hiking Adventures, Inc.
Dear Sir/Madam:
We have acted as counsel to Hiking Adventures, Inc., a Nevada corporation
(the "Company"), in connection with its Registration Statement Filed as Form
10-SB and submitted contemporaneously herewith as Form 10-SB.
In our representation we have examined such documents, corporate records,
and other instruments as we have deemed necessary and/or appropriate for the
purpose of rendering this opinion, including, but not limited to, the Articles
of Incorporation and Bylaws of the Company. In addition, we have also examined
the prior opinion of Shawn F. Hackman, P.C., former counsel to the Company.
Based upon the foregoing, it is our opinion that the Company is duly
organized and validly exists as a corporation under the laws of the State of
Nevada. We hereby consent to the use of this opinion as an exhibit to the
Registration Statement filed herewith.
Sincerely,
/s/ DAVID H. JARVIS
------------------------------------
David H. Jarvis, Esq.
Patrick C. Clary, Chartered
<PAGE> 1
EXHIBIT 3(i)
ARTICLES OF INCORPORATION
OF
HIKING ADVENTURES, INC.
Know all men by these present;
That the undersigned, have this day voluntarily associated ourselves together
for the purpose of forming a corporation under and pursuant to the provisions of
Nevada Revised Statutes 78.010 to Nevada Revised Statues 79.090 inclusive, as
amended, and certify that;
1. The name of this corporation is:
Hiking Adventures, Inc.
2. Offices for the transaction of any business of the Corporation, and where
meetings of the Board of Directors and of Stockholders may be held, may be
established and maintained in any part of the State of Nevada or in any
other state, territory, or possession of the United States.
3. The nature of the business is to engage in any lawful activity.
4. The Capital Stock shall consist of 50,000,000 shares of common stock,
$0.001 par value.
5. The members of the governing board of the corporation shall be styled
directors, of which there shall be no less than 1 nor more than 9. The
Directors of this corporation need not be stockholders. The first Board of
Directors is: Gary C. Vesperman whose address is 3123 Trueno Road,
Henderson, NV 89014.
6. This corporation shall have perpetual existence.
7. The name and address of each of the incorporators signing these Articles of
Incorporation are as follows: Gary C. Vesperman whose address is 3123
Trueno Road, Henderson, NV 89014.
8. This Corporation shall have a president, a secretary, a treasurer, and a
resident agent, to be chosen by the Board of Directors, any person may hold
two or more offices.
9. The resident agent of this Corporation shall be Gary C. Vesperman, 3123
Trueno Road, Las Vegas, NV 89014.
10. The Capital Stock of the corporation, after- the fixed consideration
thereof has been paid or performed, shall not be subject to assessment, and
the individual liable for the debts and liabilities of the Corporation, and
the Articles of Incorporation shall never be amended as the aforesaid
provisions.
<PAGE> 2
11. No director or officer of the corporation shall be personally liable to the
corporation of any of its stockholders for damages for breach of fiduciary
duty as a director or officer involving any act or omission of any such
director or officer provided however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer for acts or
omissions which involve intentional misconduct, fraud or a knowing
violation of law, or the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes. Any repeal or modification of this
Article of the Stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of
a director of officer of the Corporation for acts or omissions prior to
such repeal or modification.
I, the undersigned, being the incorporator herein above named for the
purpose of forming a corporation pursuant to the general corporation law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring that the facts within stated are true, and accordingly have hereunto
set my hand this 18th day of October, 1996.
By: /s/ Gary C. Vesperman
---------------------------------
Gary C. Vesperman
3123 Trueno Road
Las Vegas, NV89014
<PAGE> 1
EXHIBIT 3(ii)
BY-LAWS
OF
HIKING ADVENTURES, INC.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the Company shall be held
at its office in the City of Henderson, Clark County, Nevada, at 10:00 o'clock
in the Morning on the eighteenth day of October in each year, if not a legal
holiday, and if a legal holiday, then on the next succeeding day not a legal
holiday, for the purpose of electing directors of the company to serve during
the ensuing year and for the transaction of such other business as may be
brought before the meeting.
Not less than ten and not more than sixty days' written notice specifying the
time and place, when and where, the annual meeting shall be convened, shall be
mailed in a United States Post Office addressed to each of the stockholders of
record at the time of issuing the notice at his or her, or its address last
known, as the same appears on the books of the company.
SECTION 2. Special meetings of the stockholders may be held at the office of the
company in the State of Nevada, or elsewhere, whenever called by the President,
or by the Board of Directors, or by vote of, or by an instrument in writing
signed by the holders of 10% of the issued and outstanding capital stock of the
company. At least ten days' written notice of such meeting, specifying the day
and hour and place, when and where such meeting shall be convened, and objects
for calling the same, shall be mailed in a United States Post Office, addressed
to each of the stockholders of record at the time of issuing the notice, at his
or her or its address last known, as the same appears on the books of the
company.
SECTION 3. If all the stockholders of the company shall waive notice of a
meeting, no notice of such meeting shall be required, and whenever ail of the
stockholders shall meet in person or by proxy, such meeting shall be valid for
all purposes without call or notice, and at such meeting any corporate action
may be taken.
The written certificate of the officer or officers calling any meeting setting
forth the substance of the notice, and the time and place of the mailing of the
same to the several stockholders, and the respective addresses to which the same
were mailed, shall be prima facie evidence of the manner and fact of the calling
and giving such notice.
If the address of any stockholder does not appear upon the books of the company,
it will be sufficient to address any notice to such stockholder at the principal
office of the corporation.
SECTION 4. All business lawful to be transacted by the stockholders of the
company, may be transacted at any special meeting or at any adjournment thereof.
Only such business, however, shall be acted upon at special meeting of the
stockholders as shall have been referred to in the notice calling such meetings,
but at any stockholders' meeting at which all of the outstanding capital stock
of the company is represented, either in person or by proxy, any lawful business
may be transacted,
<PAGE> 2
and such meeting shall be valid for all purposes.
SECTION 5. At the stockholders' meetings the holders of fifty-one percent (51%)
in amount of the entire issued and outstanding capital stock of the company,
shall constitute a quorum for all purposes of such meetings.
If the holders of the amount of stock necessary to constitute a quorum shall
fail to attend, in person or by proxy, at the time and place fixed by these
By-Laws for any annual meeting, or fixed by a notice as above provided for a
special meeting, a majority in interest of the stockholders present in person or
by proxy may adjourn from time to time without notice other than by announcement
at the meeting, until holders of the amount of stock requisite to constitute a
quorum shall attend. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted as
originally called.
SECTION 6. At each meeting of the stockholders every stockholder shall be
entitled to vote in person or by his duly authorized proxy appointed by
instrument in writing subscribed by such stockholder or by his duly authorized
attorney. Each stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the corporation, ten days
preceding the day of such meeting. The votes for directors, and upon demand by
any stockholder, the votes upon any question before the meeting, shall be via
voice.
At each meeting of the stockholders, a full, true and complete list, in
alphabetical order, of all the stockholders entitled to vote at such meeting,
and indicating the number of shares held by each, certified by the Secretary of
the Company, shall be furnished, which list shall be prepared at least ten days
before such meeting, and shall be open to the inspection of the stockholders, or
their agents or proxies, at the place where such meeting is to be held, and for
ten days prior thereto. Only the persons in whose names shares of stock are
registered on the books of the company for ten days preceding the date of such
meeting, as evidenced by the list of stockholders, shall be entitled to vote at
such meeting. Proxies and powers of Attorney to vote must be filed with the
Secretary of the Company before an election or a meeting of the stockholders, or
they cannot be used at such election or meeting.
SECTION 7. At each meeting of the stockholders the polls shall be opened and
closed; the proxies and ballots issued, received, and be taken in charge of, for
the purpose of the meeting, and all questions touching the qualifications of
voters and the validity of proxies, and the acceptance or rejection of votes,
shall be decided by two inspectors. Such inspectors shall be appointed at the
meeting by the presiding officer of the meeting.
SECTION 8. At the stockholders' meetings, the regular order of business shall be
as follows:
1. Reading and approval of the Minutes of previous meeting or meetings;
2. Reports of the Board of Directors, the President, Treasurer and Secretary
of the Company in the order named;
<PAGE> 3
3. Reports of Committee;
4. Election of Directors;
5. Unfinished Business;
6. New Business;
7. Adjournment.
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Company shall consist of no less than
one person who shall be chosen by the stockholders annually, at the annual
meeting of the Company, and who shall hold office for one year, and until their
successors are elected and qualify.
SECTION 2. When any vacancy occurs among the Directors by death, resignation,
disqualification or other cause, the stockholders, at any regular or special
meeting, or at any adjourned meeting thereof, or the remaining Directors, by the
affirmative vote of a majority thereof, shall elect a successor to hold office
for the unexpired portion of the term of the Director whose place shall have
become vacant and until his successor shall have been elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the principal office of the
company in the state of Nevada, or elsewhere, at such place or places as the
Board of Directors may, from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors shall hold its first
annual meeting for the year immediately after the annual meeting of the
stockholders or immediately after the election of Directors at such annual
meeting.
Regular meetings of the Board of Directors shall be held at the office of the
company in the City of Las Vegas, State of Nevada on 13th of October at 10:00
o'clock in the Morning. Notice of such regular meetings shall be mailed to each
Director by the Secretary at least three days previous to the day fixed for such
meetings, but no regular meeting shall be held void or invalid if such notice is
not given, provided the meeting is held at the time and place fixed by these
By-Laws for holding such regular meetings.
Special meetings of the Board of Directors may be held on the call of the
President or Secretary on at least three days notice by mail or telegraph.
Any meeting of the Board, no matter where held, at which all of the members
shall be present, even though without or of which notice shall have been waived
by all absentees, provided a quorum shall be present, shall be valid for all
purposes unless otherwise indicated in the notice calling the meeting or in the
waiver of notice. Any and all business may be transacted by any meeting of the
<PAGE> 4
the Board. Any and all business may be transacted by any meeting of the Board of
Directors, either regular or special.
SECTION 5. A majority of the Board of Directors in office shall constitute a
quorum for the transaction of business, but if at any meeting of the Board there
be less than a quorum present, a majority of those present may adjourn from time
to time, until a quorum shall be present, and no notice of such adjournment
shall be required. The Board of Directors may prescribe rules not in conflict
with these By-Laws for the conduct of its business; provided, however, that in
the fixing of salaries of the officers of the corporation, the unanimous action
of all of the Directors shall be required.
SECTION 6. A Director need not be a stockholder of the corporation.
SECTION 7. The Directors shall be allowed and paid all necessary expenses
incurred in attending any meeting of the Board, but shall not receive any
compensation for their services as Directors until such time as the company is
able to declare and pay dividends on its capital stock.
SECTION 8. The Board of Directors shall make a report to the stockholders at
annual meetings of the stockholders of the condition of the company, and shall,
at request, furnish each of the stockholders with a true copy thereof.
The Board of Directors in its discretion may submit any contract or act for
approval or ratification at any annual meeting of the stockholders called for
the purpose of considering any such contract or act, which, it approved, or
ratified by the vote of the holders of a majority of the capital stock of the
company represented in person or by proxy at such meeting, provided that a
lawful quorum of stockholders be there represented in person or by proxy, shall
be valid and binding upon the corporation and upon all the stockholders thereof,
as if it had been approved or ratified by every stockholder of the corporation.
SECTION 9. The Board of Directors shall have the power from time to time to
provide for the management of the offices of the company in such manner as they
see fit, and in particular from time to time to delegate any of the powers of
the Board in the course of the current business of the company to any standing
or special committee or to any officer or agent and to appoint any persons to be
agents of the company with such powers (including the power to sub-delegate),
and upon such terms as may be deemed fit.
SECTION 10. The Board of Directors is vested with the complete and unrestrained
authority in the management of all the affairs of the company, and is authorized
to exercise for such purpose as the General Agent of the Company, its entire
corporate authority.
SECTION 11. The regular order of business at meetings of the Board of Directors
shall be as follows:
1. Reading and approval of the minutes of any previous meeting or meetings;
<PAGE> 5
2. Reports of officers and committeemen;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after each meeting after the
annual meeting of stockholders, shall elect a President, a Vice-President, a
Secretary and a Treasurer, to hold office for one year next coming, and until
their successors are elected and qualify. The offices of the Secretary and
Treasurer may be held by one person.
Any vacancy in any of said offices may be filled by the Board of Directors.
The Board of Directors may from time to time, by resolution, appoint such
additional Vice Presidents and additional Assistant Secretaries, Assistant
Treasurer and Transfer Agents of the company as it may deem advisable; prescribe
their duties, and fix their compensation, and all such appointed officers shall
be subject to removal at any time by the Board of Directors. All officers,
agents, and factors of the company shall be chosen and appointed in such manner
and shall hold their office for such terms as the Board of Directors may by
resolution prescribe.
SECTION 2. The President shall be the executive officer of the company and shall
have the supervision and, subject to the control of the Board of Directors, the
direction of the Company's affairs, with full power to execute all resolutions
and orders of the Board of Directors not especially entrusted to some other
officer of the company. He shall be a member of the Executive Committee, and the
Chairman thereof; he shall preside at all meetings of the Board of Directors,
and at all meetings of the stockholders, and shall sign the Certificates of
Stock issued by the company, and shall perform such other duties as shall be
prescribed by the Board of Directors.
SECTION 3. The Vice-President shall be vested with all the powers and perform
all the duties of the President in his absence or inability to act, including
the signing of the Certificates of Stock issued by the company, and he shall so
perform such other duties as shall be prescribed by the Board of Directors.
SECTION 4. The Treasurer shall have the custody of all the funds and securities
of the company. When necessary or proper he shall endorse on behalf of the
company for collection checks, notes, and other obligations; he shall deposit
all monies to the credit of the company in such bank or banks or other
depository as the Board of Directors may designate; he shall sign all receipts
and vouchers for payments made by the company, except as herein otherwise
provided. He shall sign with the
<PAGE> 6
President all bills of exchange and promissory notes of the company; he shall
also have the care and custody of the stocks, bonds, certificates, vouchers,
evidence of debts, securities, and such other property belonging to the company
as the Board of Directors shall designate; he shall sign all papers required by
law or by those By-Laws or the Board of Directors to be signed by the Treasurer.
Whenever required by the Board of Directors, he shall render a statement of his
cash account; he shall enter regularly in the books of the company to be kept by
him for the purpose, full and accurate accounts of all monies received and paid
by him on account of the company. He shall at all reasonable times exhibit the
books of account to any Directors of the company during business hours, and he
shall perform all acts incident to the position of Treasurer subject to the
control of the Board of Directors.
The Treasurer shall, if required by the Board of Directors, give bond to the
company conditioned for the faithful performance of all his duties as Treasurer
in such sum, and with such surety as shall be approved by the Board of
Directors, with expense of such bond to be borne by the company.
SECTION 5. The Board of Directors may appoint an Assistant Treasurer who shall
have such powers and perform such duties as may be prescribed for him by the
Treasurer of the company or by the Board of Directors, and the Board of
Directors shall require the Assistant Treasurer to give a bond to the company in
such sum and with such security as it shall approve, as conditioned for the
faithful performance of his duties as Assistant Treasurer, the expense of such
bond to be borne by the company.
SECTION 6. The Secretary shall keep the Minutes of all meetings of the Board of
Directors and the Minutes of all meetings of the stockholders and of the
Executive Committee in books provided for that purpose. He shall attend to the
giving and serving of all notices of the company; he may sign with the President
or Vice- President, in the name of the Company, all contracts authorized by the
Board of Directors or Executive Committee; he shall affix the corporate seal of
the company thereto when so authorized by the Board of Directors or Executive
Committee; he shall have the custody of the corporate seal of the company; he
shall affix the corporate seal to all certificates of stock duly issued by the
company; he shall have charge of Stock Certificate Books, Transfer books and
Stock Ledgers, and such other books and papers as the Board of Directors or the
Executive Committee may direct, all of which shall at all -reasonable times be
open to the examination of any Director upon application at the office of the
company during business hours, and he shall, in general, perform all duties
incident to the office of Secretary.
SECTION 7. The Board of Directors may appoint an Assistant Secretary who shall
have such powers and perform such duties as may be prescribed for him by the
Secretary of the company or by the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of Directors, the President
shall have full power and authority in behalf of the company to attend and to
act and to vote at any meetings of the stockholders of any corporation in which
the company may hold stock, and at any such meetings, shall possess and may
exercise any and all rights and powers incident to the ownership of such stock,
and which as the new owner thereof, the company might have possessed and
exercised if present. The Board of Directors, by resolution, from time to time,
may confer like powers on any
<PAGE> 7
person or persons in place of the President to represent the company for the
purposes in this section mentioned.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the company shall be issued in such manner and
at such times and upon such conditions as shall be prescribed by the Board of
Directors.
SECTION 2. Ownership of stock in the company shall be evidenced by certificates
of stock in such forms as shall be prescribed by the Board of Directors, and
shall be under the seal of the company and signed by the President or the
Vice-President and also by the Secretary or by an Assistant Secretary.
All certificates - shall be consecutively numbered, the name of the person
owning the shares represents d thereby with the number of such shares and the
date of issue shall be entered on the company's books.
No certificates shall be valid unless it is signed by the President or
Vice-President and by the Secretary or Assistant Secretary.
All certificates surrendered to the company shall be canceled and no new
certificate shall be issued until the former certificate for the same number of
shares shall have been surrendered or canceled.
SECTION 3. No transfer of stock shall be valid as against the company except on
surrender and cancellation of the certificate therefor, accompanied by an
assignment or transfer by the owner therefor, made either in person or under
assignment, a new certificate shall be issued therefor.
Whenever any transfer shall be expressed as made for collateral security and not
absolutely, the same shall be so expressed in the entry of said transfer on the
books of the company.
SECTION 4. The Board of Directors shall have power and authority to make all
such rules and regulations not inconsistent herewith as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
the capital stock of the company.
The Board of Directors may appoint a transfer agent and a registrar of transfers
and may require all stock certificates to bear the signature of such transfer
agent and such registrar of transfer.
SECTION 5. The Stock Transfer Books shall be closed for all meetings of the
stockholders for the period of ten days prior to such meetings and shall be
closed for the payment of dividends during such periods as from time to time may
be fixed by the Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate of stock in lieu of
one alleged to have been lost or destroyed, shall make affidavit or affirmation
of the fact, and shall deposit with the
<PAGE> 8
company an affidavit. Whereupon, at the end of six months after the deposit of
said affidavit and upon such person or persons giving Bond of Indemnity to the
company with surety to be approved by the Board of Directors in double the
current value of stock against any damage, loss or inconvenience to the company,
which- may or can arise in consequence of a new or duplicate certificate being
issued in lieu of the one lost or missing, the Board of Directors may cause to
be issued to such person or persons a new certificate, or a duplicate of the
certificate, so lost or destroyed. The Board of Directors may, in its discretion
refuse to issue such new or duplicate certificate save upon the order of some
court having jurisdiction in such matter, anything herein to the contrary
notwithstanding.
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the corporation, in Nevada shall be at 3123
Trueno Road, Henderson, and the company may have a principal office in any other
state or territory as the Board Directors may designate.
SECTION 2. The Stock and Transfer Books and a copy of the By-Laws and Articles
of Incorporation of the company shall be kept at its principal office in the
County of Clark, state of Nevada, for the inspection of all who are authorized
or have the right to see the same, and for the transfer of stock. All other
books of the company shall be kept at such places as may be prescribed by the
Board of Directors.
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to reserve over and above the
capital stock paid in, such an amount in its discretion as it may deem advisable
to fix as a reserve fund, and may, from time to time, declare dividends from the
accumulated profits of the company in excess of the amounts so reserved, and pay
the same to the stockholders of the company, and may also, if it deems the same
advisable, declare stock dividends of the unissued capital stock of the company.
SECTION 2. No agreement, contract or obligation (other than checks in payment of
indebtedness incurred by authority of the Board of Directors) involving the
payment of monies or the credit of the company for more than $10,000 dollars,
shall be made without the authority of the Board of Directors, or of the
Executive Committee acting as such.
SECTION 3. Unless otherwise ordered by the Board of Directors, all agreements
and contracts shall be signed by the President and the Secretary in the name and
on behalf of the company, and shall have the corporate seal thereto affixed.
SECTION 4. All monies of the corporation shall be deposited when and as received
by the Treasurer in such bank or banks or other depository as may from time to
time be designated by the Board of Directors, and such deposits shall be made in
the name of the company.
<PAGE> 9
SECTION 5. No note, draft, acceptance, endorsement or other evidence of
indebtedness shall be valid or against the company unless the same shall be
signed by the President or a Vice-President, and attested by the Secretary or an
Assistant Secretary, or signed by the Treasurer or an Assistant Treasurer, and
countersigned by the President, Vice-President, or Secretary, except that the
Treasurer or an Assistant Treasurer may, without countersignature, make
endorsements for deposit to the credit of the company in all its duly authorized
depositories.
SECTION 6. No loan or advance of money shall be made by the company to any
stockholder or officer therein, unless the Board of Directors shall otherwise
authorize.
SECTION 7. No director nor executive officer of the company shall be entitled to
any salary or compensation for any services performed for the company, unless
such salary or compensation shall be fixed by resolution of the Board of
Directors, adopted by the unanimous vote of all the Directors voting in favor
thereof.
SECTION 8. The company may take, acquire, hold, mortgage, sell, or otherwise
deal in stocks or bonds or securities of any other corporation, if and as often
as the Board of Directors shall so elect.
SECTION 9. The Directors shall have power to authorize and cause to be executed,
mortgages, and liens without limit as to amount upon the property and franchise
of this corporation, and pursuant to the affirmative vote, either in person or
by proxy, of the holders of a majority of the capital stock issued and
outstanding; the Directors shall have the authority to dispose in any manner of
the whole property of this corporation.
SECTION 10. The company shall have a corporate seal, the design thereof being as
follows:
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-Laws may be made at any regular or
special meeting of the Board of Directors by a vote of not less than all of the
entire Board, or may be made by a vote of, or a consent in writing signed by the
holders of fifty-one percent (51%) of the issued and outstanding capital stock.
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, being the directors of
the above named corporation, do hereby consent to the foregoing By-Laws and
adopt the same as and for the By-Laws of said corporation.
IN WITNESS WHEREOF, we have hereunto set our hands this eighteenth day of
October, 1996.
/s/ Gary C. Vesperman
- -------------------------------------
Gary C. Vesperman
/s/ Robert Bernardino
- -------------------------------------
Robert Bernardino
<PAGE> 1
EXHIBIT 10
THIS AGREEMENT is made as of the 10th day of June, 1999, by and between
HIKING ADVENTURES, INC., a Nevada corporation (hereinafter called "the
Publisher"), and BUSINESS CONCEPTS, INC., a Nevada corporation (hereinafter
called "the Buyer").
WITNESSETH:
1. PURCHASE AND SALE. The Publisher hereby agrees to sell to the Buyer and the
Buyer agrees to purchase from the Publisher three (3) sets of hiking guide books
published by the Publisher to be entitled "Bears Ears-Lizard Head-North Fork
Popo Agie-High Meadows Trail Loop Hiking Adventures" (hereinafter called "Guide
#1"), "Bird Ridge Trail Hiking Adventure" (hereinafter called "Guide #2"), and
"Mount Abbott Trail Hiking Adventure"(hereinafter called "Guide #3") in
quantities of 20,000 for each set, for a total of 60,000 books, at a price of
$3.15 per guide subject, however, to a six percent (6%) volume discount, for a
net price of $2.961 per book, payable upon delivery (COD), according to the
following schedule:
<TABLE>
<S> <C> <C> <C>
Guide #1 August 1, 1999 5,000 books $14,805
September 1, 1999 5,000 books $14,805
First day of each 1,000 books $ 2,961 per month
month for the next
10 months
TOTAL after 12 20,000 books $59,220
months
Guide #2 October 1, 1999 5,000 books $14,805
November 1, 1999 5,000 books $14,805
First day of each 1,000 books $ 2,961 per month
month for the next
10 months
TOTAL after 12 20,000 books $59,220
months
Guide #3 December 1, 1999 5,000 books $14,805
January 1, 2000 5,000 books $14,805
First day of each 1,000 books $ 2,961 per month
month for the next
10 months
TOTAL after 12 20,000 books $59,220
months
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
TOTALS 60,000 books $177,660
</TABLE>
As a down payment, the Buyer will pay to the Publisher the sum of $15,000 on or
before July 10, 1999, which will be applied against the August 1, 1999 and
September 1, 1999 payments.
2. LOCAL DELIVERY. The parties hereto that they are both located in Clark
County, Nevada, as a consequence of which there will be no delivery charges
assessed against either party in connection with the transactions.
3. COMMISSION AND ROYALTIES. The Publisher will not be entitled to
receive from the Buyer any commissions, royalties or other compensation other
than that provided for above in this Agreement.
4. DISTRIBUTION. The Buyer's distribution and marketing of the books as
aforesaid will be unrestricted, so that the Buyer may sell the books either by
wholesale or retail sales or give the books away for no consideration.
5. MISCELLANEOUS PROVISIONS.
(a) This Agreement contains the entire agreement between the parties
hereto and supersedes all other agreements with respect to the subject matter of
this Agreement whether written or oral.
(b) This Agreement may not be modified except by a written instrument
signed by the parties hereto.
(c) This Agreement shall be binding upon parties hereto and their
respective successors and assigns.
(d) This Agreement shall be construed and interpreted in accordance
with the Laws of the State of Nevada, without regard to the principles of
conflicts of laws.
(e) In the event of the commencement of suit or other legal
proceedings by either of the parties hereto against the other party hereto which
in any way relates to this Agreement or the relationship of the parties hereto,
the prevailing party will be entitled to receive attorneys fees and costs as a
court may adjudge reasonable in addition to any other relief granted.
(f) In the event that any dispute arises between the parties hereto
(including the matters expressed herein), the exclusive resolution thereof shall
be the federal and state courts located within Clark County, Nevada, and each of
the parties hereto hereby expressly and irrevocably consents to such
jurisdiction.
(g) The parties hereto shall execute such other documents and may be
required hereunder to carry out the terms and conditions of this Agreement.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
HIKING ADVENTURES, INC. BUSINESS CONCEPTS, INC.
By: /s/ Gary C. Vesperman By: /s/ Edward V. Stambro
-------------------------------- ----------------------------------
Gary C. Vesperman, President Edward V. Stambro, President
<PAGE> 1
EXHIBIT 16
L.L. Bradford & Company
Certified Public Accountants & Consultants
34413 Eastern Avenue
Las Vegas, Nevada 89109
March 2, 1999
Kurt Saliger, CPA
5000 W. Oakey Boulevard, #A-4
Las Vegas, NV 89146
RE: HIKING ADVENTURES, INC.
Dear Mr. Saliger:
We have not been involved in any litigation with Hiking Adventures and the
Company does not have an outstanding balance to date for services rendered by
our firm. In addition, we did not have any disputes with the Company's
management which could not be resolved regarding the Company's accounting
principles, auditing procedures, or similarly significant items.
If you have any further questions, please contact me at 735- 5030.
Sincerely,
/s/ LEILANI BRADFORD
---------------------------------
Leilani Bradford, CPA
<PAGE> 1
EXHIBIT 23
Kurt D. Saliger
Certified Public Accountant
5000 West Oakey
Suite A-4
Las Vegas, Nevada 89146
August 26, 1999
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: HIKING ADVENTURES, INC.
FORM 10-SB
Dear Sir or Madam:
As a Certified Public Accountant, I hereby consent to the inclusion of my
reports dated July 7, 1998, March 24, 1999 and August 26, 1999, in the Form
10-SB filed by Hiking Adventures, Inc., including all references to my reports
to the extent they are concurrent therewith and contained in the Form 10-SB.
By: /s/ KURT D. SALIGER
---------------------------------
Kurt D. Saliger, C.P.A.
<PAGE> 1
EXHIBIT 24
Special Power of Attorney
The undersigned hereby constitutes and appoints Gary C. Vesperman his true
and lawful attorney-in-fact and agent with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Form 10SB-2/A
Registration Statement, and to file the same with all exhibits thereto, and all
documents in connection therewith, with the Securities and Exchange Commission,
granting such attorney-in-fact the full power and authority to and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that such attorney-in-fact may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Dated
- --------- ----- -----
<S> <C> <C>
By: /s/ GARY C. VESPERMAN President August 30, 1999
----------------------------
Gary C. Vesperman
By: /s/ TIMOTHY J. ZELENKA Secretary and August 30, 1999
-------------------------------- Treasurer
Timothy J. Zelenka
</TABLE>
<PAGE> 1
EXHIBIT 99
HIKING ADVENTURES, INC.
PLAN OF OPERATIONS
For Fiscal Year beginning July 1, 1999 and ending June 30, 2000.
RESULTS OF OPERATION
The Company's Results of Operations prior to July 1999 are reflected in the
accompanying Independent Auditor's Report.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1999, the Company's current assets were $27,291 and its current
liabilities were $0.00. The current assets exceed current liabilities by
$27,291. As of August 1999, the first delivery of hiking guides under an
Agreement dated June 10, 1999 attached as reference to the Registration
Statement as Exhibit 10, the Company will be considered a going concern. A
going concern, by its terms, contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
Total assets are expected to significantly increase as a result of an
Agreement, dated June 10, 1999, to $121,825.80 over the base contract period
July 1999 through June 2000. (This asset projection includes no assumptions
based on other potential operations considered by the company). Total
liabilities are expected to remain at $0.00.
Stockholders' equity (deficit) of ($17,701) accumulated during development stage
should not increase over the next twelve (12) months. To increase its capital
position and begin operations, the Company entered into a contract (Agreement)
with Business Concepts, Inc., a Nevada Corporation, dated June 10, 1999. (See
Exhibit 10 to Registration Statement.)
A significant, albeit estimated, commitment for the Company during the next
twelve (12) months will be the publishing and deliver of 60,000 hiking guides.
Other significant commitments for the Company will be to establish a Company
web-site on the Internet providing information services and guides to hikers.
From August 1, 1999, through the sixteen (16) months ending November 1, 2000,
management believes that the Company can satisfy its cash requirements. In the
event that Business Concepts, Inc., is unable to meet its obligations under
the terms of the Agreement, the Company anticipates that it will raise
additional operating capital, as needed, by stock sales.
Management does not anticipate any purchases or sales of plant and/or
significant equipment, nor does management expect any significant changes in
the number of its employees.
There are currently no required allocations for compliance with environmental
regulations.
EMPLOYEES
<PAGE> 2
The Company currently employs two people. The Company's President devotes 40% of
his time to Company affairs and the Company's Secretary/Treasurer devotes 10%
of his time to further the Company's objectives and business plan.
MANAGEMENT'S PLAN OF OPERATION
The Company's plan of operation for the next three years is to expand
operations, subject to availability of capital, by printing 11 additional
hiking guides covering the West Coast and expanding subscriber participation
via the Internet. To accomplish this objective the Company intends to retain
the services of seasoned Internet business professionals, including web-page
designers. With current Internet usage statistics along with the growth
associated therewith, the Company believes that it will be provided with an
avenue for expansion into markets that the Company's capitalization would not
have allowed them to previously reach absent Internet technology. The Company
believes that through such a means, expansion without debt service may be
possible.
The Company is in the process of expanding by initiating development of its
web-page, which is expected to be placed on all major Internet search engines.
This will allow the Company's target market access to a web-site that provides
information and hiking guides for many regional recreational areas.
The Company plans on acquiring, subject to availability of capital, new
computer equipment which should streamline, accelerate and increase the
capacity for marketing hiking guides and associated editorial matter regarding
many vacation markets to hikers around the globe.
THE COMPANY
The proposed business of the Company is to provide hiking guides. From
inception through the date of the Agreement, the Company conducted no business
other than organizational activities.
As of January 13, 1998, the Officers had each purchased 100,000 shares of
common stock for a total consideration of $13,494. The Company on that date had
200,000 issued and outstanding shares.
On July 6, 1998, the Company completed a Regulation D 504 offering for $30,000
(600,000 shares). Accordingly, the total issued and outstanding shares rose to
800,000.
On April 8, 1999, the Company filed Registration Statement on Form 10-SB.
On June 10, 1999, the Company entered into an Agreement with Business Concepts
Incorporated, a Nevada Corporation. On June 30, 1999, Business Concepts, Inc.,
made an initial payment of $15,000 to be applied to a future shipment of hiking
guides expected to be published on or about August 1, 1999. (See Note 5 -
Audited Financial Statements dated June 30, 1999.) The essential terms of the
Agreement are contained in Exhibit 10 to the Registration Statement.
MILESTONES
<PAGE> 3
The Company is currently in the development stage and expects to reach
milestones more fully set forth below. The Company currently has a contract to
deliver the three distinct guides.
COMPLETION
Complete first guide, print, and deliver August 1, 1999
Begin Online Sales (web-site) September 15, 1999
Complete second guide, print, and deliver October 1, 1999
Complete third guide, print, and deliver December 1, 1999
Begin Compensation plan for officers and acquire offices other than currently
provided by President January 1, 2000
In the event that the Company is unable to achieve the certain milestones and
fulfill the Agreement dated June 10, 1999, the Company could suffer severe cash
flow problems and may cease at that point to be a viable commercial entity.
WORKING CAPITAL REQUIREMENTS
The Company does not anticipate having any cash flow or liquidity problems over
the fiscal period covered by the Agreement dated June 10, 1999.
The Company is not in default or in breach of any note, loan, lease or other
indebtedness or financing arrangement requiring the Company to make payments.
There are no trade payable. The Company is not subject to any unsatisfied
judgments, liens or settlement obligations.
RISK FACTORS FORESEEN BY MANAGEMENT
A SUCCESS OF BUSINESS - The Company may not be successful in its effort to
further its business. Even if the Company were to successfully meet the goals
set forth in its business plan, such goals may not be achieved within the time
frames set forth. The limited extent of the Company's assets and the Company's
stage of development as well as the Company's limited operating history make it
subject to the risks associated with start-up companies.
B MANAGEMENT - The Company's present management structure, although adequate
for the early stage of its operations, will likely require significant
augmentation as operations commence and expand. The Company's ability to
recruit and retain capable and effective individuals is unknown, although there
appear to be many such people within the industry worldwide.
C COMPETITION - The Company intends to enter into markets, which are relatively
new and are, therefore, difficult to predict in terms of the level of demand
for the Company's product an services. In addition, such markets are or likely
will be subject to intense competition from both private and
<PAGE> 4
public businesses nationally and/or around the world, many of who have greater
financial and technical resources than the Company. Such competition as well as
any future competition may adversely affect the Company's success in the
marketplace. There can be no assurance that the Company will be able to
successfully compete in such a highly competitive marketplace.
D FINANCIAL ASSUMPTIONS - The Company will rely on internally prepared
forecasted financial statements, which are predicated on certain assumptions,
including assumptions of revenue and expense and the occurrence of certain
future events, which in turn were based on management's considered assessment of
prevailing conditions and management's best estimates of future events. Should,
for example the Company's actual costs exceed the assumed levels, then the
impact on the Company's projected profits would be adverse. In the final
analysis, any return to an investor in the Company will in large part be
determined by management's ability to execute the Company's plan as projected,
and there can be no assurances of success provided.
E PUBLIC MARKET - There is not now, and there may never be, a public market of
any kind for the securities issued by the Company. There is no assurance that
the price of the Company's shares in any market, which may develop will be
greater than the offering price. As a result of these factors, holders of the
Company's Common Stock may not be able to liquidate their investment.
F PENNY STOCK - The Company's securities may be deemed a penny stock, as defined
by Rule 3a51-1 of the Securities and Exchange Act of 1934, as amended. Such as
designation could have a material adverse effect on the development of the
public market for shares of the Company's common stock or, if such a market
develops, its continuation, since broker-dealers are required to personally
determine whether an investment in any security is suitable for customers prior
to any solicitation of any offer to purchase these securities. Compliance with
procedures relating to sale by broker-dealers of A penny stocks may make it more
difficult for purchasers of the Company's common stock to resell their shares to
third parties or to otherwise dispose of such shares.
G ABILITY TO RAISE ADDITIONAL CAPITAL - The Company at this time does not
anticipate the necessity for any additional capital, but if additional funds for
expansion and/or growth are not available, the investors may lose their entire
investment. Additional financing may come in the form of securities offerings or
from bank financing. If additional shares are issued to raise capital, existing
shareholders will suffer a dilution of their stock ownership in the Company,
however, the book value of their shares should not be diluted, provided
additional shares are sold at a price greater than that paid by the shareholder.
H POTENTIAL CONFLICTS OF INTEREST - There are various interrelationships between
the officers and directors of the Company, which create conflicts of interest
that might be detrimental to the Company. The officers and directors will not be
able to devote full time to the affairs of the Company as each has other
business interests to which they devote some of their time.
I NO FORESEEABLE DIVIDENDS - The Company does not anticipate paying any
dividends on its Common Stock in the foreseeable future.
J INTELLECTUAL PROPERTY - The Company does not have any patents for its
technology and
<PAGE> 5
there can be no assurance that the Company will be able to protect its
proprietary rights from use by its competitors. The commercial success of the
Company may also depend upon its products and services not infringing any
intellectual property rights of others and upon no such claims of infringement
being made.
K CURRENT TECHNOLOGY - The technology necessary to create a service such as the
one the Company will be offering exists today and is readily accessible,
therefore, there is an ease of entry and exit for would-be competitors.
L INTERNET - Use of the Internet by consumers is at a very early stage of
development, and market acceptance of the Internet as a medium is subject to a
high level of uncertainty. The Company expects to experience significant
fluctuations in operating results in future periods due to a variety of
factors, including, but not limited to, (1) market acceptance of the Internet as
a medium for consumers, (ii) the Company's ability to create and deliver
Internet content in order to attract users to its web-sites to purchase its
product and/or services, and to attract advertisers to it web-sites, (iii) there
can be no assurance that the Company's content will be attractive to a
sufficient number of users to generate significant revenues, (iv) intense
competition from other providers of related content over the Internet, (v)
delays or errors in the Company's ability to effect electronic commerce
transactions, (vi) the Company's ability to upgrade and develop its systems and
infrastructure in a timely and effective manner (vii) technical difficulties,
system downtime or Internet brownouts, (viii) the Company's ability to attract
customers at a steady rate and maintain customer satisfaction, (ix) seasonality
of the industry, (x) seasonality of advertising sales, (xi) Company promotions
and sales programs, (xii) the amount and timing of operating costs and capital
expenditures relating to expansion of the Company's business, operations and
infrastructure and the implementation of marketing programs, key agreements and
strategic alliances, (xiii) the level of returns experienced by the Company;
and (xiv) general economic conditions and economic conditions specific to the
Internet.
Note: In addition to the above risks, businesses are often subject to risks not
foreseen or fully appreciated by management. In reviewing this filing,
potential investors should keep in mind other possible risks that could be
important.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE AUDITED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S FORM 10-SB. THE
CONTENTS OF THIS FINANCIAL DATA SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH AUDITED FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 40,785
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40,785
<PP&E> 1,200
<DEPRECIATION> 0
<TOTAL-ASSETS> 42,171
<CURRENT-LIABILITIES> 18,550
<BONDS> 0
0
0
<COMMON> 800
<OTHER-SE> 44,192
<TOTAL-LIABILITY-AND-EQUITY> 42,171
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,369
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,369)
<INCOME-TAX> (1,369)
<INCOME-CONTINUING> (1,369)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,369)
<EPS-BASIC> .001
<EPS-DILUTED> .001
</TABLE>
